A senior economist at the world’s second-largest currency trading bank has claimed that Greece will leave the eurozone on January 1st 2013. Citigroup’s Michael Saunders said Greece’s new currency would fall in value immediately by 60% and unleash a massive, yet manageable wave of contagion across Europe.
He said that the likelihood of Greece leaving the euro in the next year was between 50-75%. The theory is based on the belief that Greece will form a government capable of implementing austerity measures after its next set of elections on June 17.
Saunders said: “We expect that Grexit will be followed by a series of policy responses aiming to prevent a domino-style collapse of the banking system and escalating economic disruption.” The claim came as stock markets across Europe remained stable today despite increased fears of Greece’s chaotic exit - and a growing rift between France and Germany on plans to save the single currency.
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